Three Point

February 15, 2021 | Leave a Comment

Victor Niederhoffer writes:

Phil Musia in the post has an article about  how the three point shot which has gone up to 80 per game from 20 years ago is ruining the basketball game.  What aspects of markets have changed for the worse in the last 20 years? 

Penny Brown writes:

What's worse?  The abandonment of the up tick rule for shoring.



Alex Castaldo writes:

what does dr burry mean by his btc mining tweet today

(20) Cassandra on Twitter: "70% of $BTC is mined in sanctioned countries, China, Iran, Russia. Crypto is in a race - add enough reputable agents of commerce to counter and overcome the inevitable coordinated actions of the ECB/BoJ/Fed/IMF/WorldBank-level powers-that-be to crush it. https://t.co/glYdmeTJ4g." / Twitter

70% of $BTC is mined in sanctioned countries, China, Iran, Russia. Crypto is in a race - add enough reputable agents of commerce to counter and overcome the inevitable coordinated actions of the ECB/BoJ/Fed/IMF/WorldBank-level powers-that-be to crush it. 

Pete Earle writes:

He's saying that BTC needs to grow its network and become a more compelling medium of exchange in order to survive the likely outcome of the governments and monetary authorities in China and Russia (Iran?) putting severe criminal penalties on its mining and usage. Meh. 

Does not follow that if mining were quashed in those countries other miners elsewhere wouldn't fill the gap, but it would be a bumpy ride and the price would almost definitely suffer. (There's also the remote chance that in the tumult that would follow miners going offline there could be a 51% attack.) But it strikes me that when an illicit enterprise becomes big enough (gambling, marijuana, etc.) governments would rather become privileged providers and gatekeepers than suppressors. 

Jayson Pifer writes:

Burry seems to be missing that cheap electricity wins.  It's not a matter of simply adding reputable agents when they will not be able to scale to compete with Chinese miners.  Not to mention that those sanctioned countries are incentivized to mine heavily and therefore keep the security of the network high.  I don't really see this changing.

I'm curious what sort of coordinated actions he supposes will be taken by the power-that-be.  For the foreseeable future it appears to be concurrent debasement of currencies to the benefit of cryptos.

I forget who on the list was running a mining operation, the information shared was valuable.  Perhaps we could get some recent insight.




January 30, 2021 | Leave a Comment

Zubin Al writes: 

At a surf break, the waves tend to focus and break in a small area ideal for taking off in a surfboard.  In a normal surf line up where the surfers wait for waves people crowd up, and informally queue up for their turn at the wave. However, 20% of the surfers usually get 80% of the waves.  These are the top feeders.  

I've learned how to foil surf on hydrofoils that fly above the water.  The take off spot is in a different spot that where the board surfers drop in, and the high speed and efficiency of the foil allow riding in places where the board riders don't and can't ride.  I can also ride breaks and wave conditions where board riders cannot and don't want to ride.  After close to 60 years surfing, its opened up a whole new world of surfing for me.  Due to the extreme difficulty learning to foil, and the very high expense of the equipment, there are only a handful of foil surfers around.  We reap uncrowded waves and   thrilling high speed rides flying above the water.  

In the ecology of the market, there are many niches.  Props to the GME traders who found a new niche.  In the law of changing cycles,though, the top feeders and brokers move to protect their niche in the greater picture of the market. 

The question is whether the de leveraging and higher margins and deposits for brokers in that niche will spread and affect the general market bringing it down a notch.

One theory I've had is that big waves correlate with high volatility.  Its pure superstition.  Under my theory, wive big waves down this weekend and with big waves possible Wednesday and Thursday market vol will be up midweek.  This is pure mumbo, never tested and just for fun.


Jeff Watsurf writes: 

I started foil surfing a few years ago, using a kite. A total game changer in my humble opinion.



Arc Sine Law

January 22, 2021 | Leave a Comment

50's gravitational effect in  effect today, together with the tendency toward new highs to continue.  Hard to believe but that  is what creates the wall of worry bull markets climb.




January 22, 2021 | Leave a Comment

Victor Niederhoffer  writes:

What can we learn and what insights do the football  games and quan regularities has to teach us about markets. I often feel that the 50 years zone is  transition to likely touchdown as is the 80 to 100 level the redone where  it is likely to go to 100.

Eric Lindell   writes:

I've found that general knowledge of shenanigans can be helpful. Consider deflategate, where Tom Brady/Patriots were accused of using deflated footballs.

Careful review of highlight reel shows intentionally missed passes by the Colts, which even the announcer noticed.

Deflated footballs were used as a minor cheating scandal to conceal a much more serious one. They were also used to create the illusion that the Colts were resisting Patriots' attempt to cheat.

It was partly because Brady and concomitant shenanigans moved to the Buccaneers that I predicted a good season for them. I still do.



Jeffrey Watson  writes:

I wonder if specs as children would eat the marshmallow now or wait the 15 minutes and get another one?


Stefan Jovanovich  writes:

The fraud in social science is that its practitioners almost always end up being Platonists.  Instead of doing what Darwin and others did - collecting data in massive quantities and then using mathematics to find the probabilities, they define an idea - delayed gratification - and then work at finding the evidence that proves that the idea exists.  The law - the worst of all modern social sciences - does this automatically.  If you repeated the marshmallow experiment a hundred times, you would get the beginnings of understanding.  You might discover that the issue with the child who does not wait on the first trial is trust of strangers, that, after seeing that waiting does get you a second one, he is happy to wait as long as required.  If you change the reward structure so it is competitive - the one who waits longer gets 2, you would see yet another result.  The length of the finches' beaks is a statistical response to reality, not a measure of any particular bird's desire for instant or delayed gratification.

To answer Watsurf's question, for marshmallows I could wait forever - hate the things and always have.  For black licorice, I would have stolen the other kids before he had a chance to think.

Anna K writes: 

Stefan, very good points about all the issues with the test, but do you really think that “delayed vs instant gratification” doesn’t exist or doesn’t matter? 

Stefan Jovanovich  writes:

To give AK's questions a binary answer, No and No.  Delayed gratification is another categorical description that pretends human beings have innate behavioral qualities that can be quantitied, will be stable over time, and have predictive value.  But, the only measure that more than a century of experimental  data has shown to have a correlation with future behavior is the one that makes no effort to dissect people's minds but takes them completely as a whole - IQ.  And that, of course, is the very measure that has become illegal because it can foretell what individuals can and will do.

Penny Brown writes: 

Towards that end, De Blasio has decided to end testing to determine which students receive a place in schools for the gifted and talented.

No one is allowed to be superior in his world.  He has foster the dumbing down of education because having superior achievers is not equal.

Henceforth admission to the schools for  gifted students will just be determined by a lottery.



Galton on Politics

January 12, 2021 | Leave a Comment

Victor Niederhoffer  writes: 

Why a slight switch in sentiment can cause a landslide of change.  I'll
get the exact quote somewhat  later but this is good  concerning the
tendency of oxen and human to have a preference for slavery

Penny Brown writes: 

A quote from Maxim du Camp - friend of Flaubert: "Revolution is always
the same: initiated by simpletons, helped along by fools, pushed through
by rogues and then taken over by the opportunists who do quite well."



Zubin Al writes: 

Recently at a restaurant at lunch, two blue collar guys, one older, one
younger guy with a beard, both  in electricians uniforms sit down and  I
overhear the young guy explaining to the older guy about buying stocks,
and how if they double how much money he can make.  He says he doesn't
care how much it goes down, and that he will hold on.  The conversation
moves to Bitcoin, and the younger guy doesn't quite understand how it
works but that it keeps going up. To myself I'm thinking, "hmmm".  I
remember in late 1999 walking into the broker's office where I see a
young woman who I remember waiting tables there buying stocks.  I recall
taxi drivers during that same period talking stocks as conversation in
the cabs.

I wonder, is it different this time?

Dr Gangineni Dhananjhay writes: 

I have also got a similar experience in India. Near the brokerage
company where I regularly go to trade, I visit a Coffee stall. The
person running the coffee shop started giving stock advice. Which stocks
to buy and sell and general market opinion. I got afraid. Of course
this is an anecdotal evidence. I am seeing more of my relatives and
family members giving me stock advice. Time to be cautious ??

Jack Cook writes: 

For me, the Spring of 2001 'Aha Mr. Livermore, this is the top?  My
Masseuse was working on my lats and telling tales of retiring on all the
Cisco stock he had.

He is still my Masseuse.

Best in 2021


TikTok and Discord Are the New Wall Street Trading DesksCaitlin McCabe, Gunjan Banerji and Mischa Frankl-Duval-WSJ. A
new army of social media-enabled day traders is helping push stocks to
records and turning companies into market sensations. As trading by
individual investors boomed during the coronavirus pandemic, so has the
popularity of online communities where they gather. Platforms including
TikTok, Twitter, YouTube, Reddit, Instagram, Facebook and messaging
platform Discord have become the new Wall Street trading desks.
Individual investors gather to talk about hot stocks like Tesla Inc.,
boast of gains and commiserate about losses. These investors do more
than just talk, though. They piggyback on each others' ideas and trades,
helping fuel the momentum that has propelled some companies to
triple-digit or bigger gains in 2020.



Stefan Jovanovich writes: 

Somewhere in digital maw is an earlier email of mine to the List with a copy of the wonderful cartoon that appeared recently in France.  It has the 3 wise men visiting Joseph, Mary, and the baby Jesus and the animals in the manger.  Each wise man is carrying a syringe.  The caption reads (apologies for my hopelessly bad non-existent French): "We'll try it first on the donkey and then see what happens."  The expression on the donkey's face is priceless.

As a perfect antidote to the varieties of idiocy out there, I recommend Brigitte Engerer's extraordinary performance of Chopin's Nocturnes.  She was perfection and someone who knew herself.

"I need the transparency of the French piano — and, more important, the rationality of French philosophy. But I needed some of the Russian craziness in my playing. I still do."


 Adam Grimes writes: 

I've always loved her interpretation of the Nocturnes. If memory serves, she had a very impressive recording of the Mussorgsky Pictures, too. 

If you want to explore some more esoteric Chopin, see if you can find the Mazurkas as recorded by Andrzej Wasowski. If you know these pieces, you'll find his ideas challenging, to put it kindly… but there's a very good chance he's on the right track. (Basically, the beats tend to be unequal, leaning toward the uneven meters we find later in Bartok and others… it certainly makes sense that a Polish folk dance might have had (should probably read "very likely did have") some of the same characteristics that we associate with Romanian and Bulgarian folk music.)  

I'm not sure if you can find his recordings on YouTube, but it's worth tracking down a CD if you have to.



 This is one of my favorite stories. I hope you enjoy it, and I wish you a Merry Christmas. — Victor Niederhoffer

High on the mountainside by the little line cabin in the crisp clean dusk of evening Stubby Pringle swings into saddle. He has shape of bear in the dimness, bundled thick against cold. Double stocks crowd scarred boots. Leather chaps with hair out cover patched corduroy pants. Fleece-lined jacket with wear of winters on it bulges body and heavy gloves blunt fingers. Two gay red bandannas folded together fatten throat under chin. Battered hat is pulled down to sit on ears and in side pocket of jacket are rabbit-skin earmuffs he can put to use if he needs them.

Stubby Pringle swings up into saddle. He looks out and down over worlds of snow and ice and tree and rock. He spreads arms wide and they embrace whole ranges of hills. He stretches tall and hat brushes stars in sky. He is Stubby Pringle, cowhand of the Triple X, and this is his night to howl. He is Stubby Pringle, son of the wild jackass, and he is heading for the Christmas dance at the schoolhouse in the valley.

[For the entire text of the story, please follow this link].



December 3, 2020 | Leave a Comment

Laurence Glazier writes: 

In Sci Fi the Peter Hamilton trilogies and Adrian Tchaikovsky's tales.

But my main find in 2020 is the app Notion - notion.so - and among other uses for it I have been applying Tiago Forte's Second Brain method for storing favourite snippets for future access. If anything I find more wisdom in fiction than non-fiction. in a sense that makes it truer.

James Goldcamp  writes: 

Hi Laurence - Can you expand on how you use this app and Second Brain method.  I've actually been contemplating some kind of note app particularly for the purpose of putting excerpts and ideas from things I read or thoughts I have more at my fingertips. I've willfully resisted such technology to this point but think something along these lines might be useful

Leo Jao writes: 

Just checked a bit on Notion, can't yet recommend about its advantages, but have noticed major drawbacks of a note taking software.  In the past years, I have tried and used quite a few of them.  Of course in this age, a key feature is being able to sync notes across devices.  The big names include Evernote, OneNote, Keep, in addition to other lesser known one's.  One issue is at some point in time, one gets concerned about privacy and security of the contents, as with these sync'able platforms, contents are all stored in their servers.  For this or other reasons, one wants to switch to other platforms at some point.  There then is a key issue: one can't easily take the contents away!  Notion has these two issues.  I see that it can export a single note, but misses a feature of exporting all notes.

For the past year, I settled on an open source software called Joplin.  For syncing, it provides various ways without having to use a public server.  Notes can be easily exported.


Michael Chuprin writes: 

Victor's contribution to this thread:
In no specific order:
1.The Psychology of Speculation: The Human Element in Stock Market Transactions
2.Fourteen Methods of Operating in the Stock Market
3.The Mad Dog 100: The Greatest Sports Arguments of All Time
4.Wealth, War and Wisdom
5.The West of the Imagination
7.Regression Analysis and Linear Models: Concepts, Applications, and Implementation
8.Man on Earth: A Celebration of Mankind: Portraits of Human Culture in a Multitude of Environments
9.Voices of the French Revolution
10.The Decline and Fall of the British Empire, 1781-1997
11.Lone Star Rising: The Texas Rangers Trilogy



New High for BTC

December 1, 2020 | Leave a Comment

Andrew Aiken writes: 

BTC made a new ATH this morning, nominally at least.

I expect a strong breakthrough move, although such a move may take a few days.

The rally from March has not been accompanied by much notice from retail financial media.

Instead, there has been significant adoption by traditional money managers (Paul Tudor Jones, Stanley Druckenmiller, etc) and corporate treasuries (e.g. Microstrategy).

For lower-risk exposure to crypto, I suggest taking a look at Galaxy Digital Holdings (ADR: BRPHF), a crypto-focused asset management firm with additional lines of business in prime brokerage, market-making, and investment banking in the space. 

At current BTC and ETH prices, it trades at an 8% discount to tangible book value (not AUM).

The firm holds 16,651 BTC ($327M) in its corporate treasury alone.


Dendi Suhubdy writes: 

Fyi I’m building a crypto derivatives exchange test it out here https://testnet.bitwyre.com. Will be live on https://bitwyre.com on new years eve



Leo Jia writes: 

Underspecification.  Observed effects can have many possible causes.  So when you have say 50 models that analyze the causes from various prospectives, and all worked well in tests, but in the real world on a specific case, they present different results, and you are faced with uncertainty as to which one to take.  This also relates to our mind and life experiences, doesn't it?  In life, one has learned how to do all this and all that, but when faced with a situation, one struggles on what approach to take.


Dendi Suhubdy writes: 

It’s not fundamentally flawed at all. I’ve been working with a Turing award winner in deep learning since 2016 and built multiple startups in the field of deep learning.

I can say it relies on the backpropagation algorithm, which means it needs to have the function (linear or non-linear, nonlinear for deep neural networks) to be differentiable (what we call the backward pass). When we do inference (or the foward pass) it’s just simply matrix multiplication of (weights * prev_input) + bias.

Now to achieve a better understanding of how our world works, we need to have to learn from few-shots, or zero-shots. Also we need to be able to quickly learn from a smaller sample size. This problem is hard and I believe we (the deep learning people) are working on it.

Larry W writes: 

I have spent a lot of money developing AI trading strategies and so far…none of them are better—or even close —to man-made strategies






US CPI 0.00%

November 19, 2020 | Leave a Comment

Dr. Zacek  writes: 

Question for all the smart people here. Why is the CPI 0% in the USA if whatever I buy here in AZ, I pay considerably more compared to 9 months ago (end Feb)?

What is it I am missing? What did go cheap sooo much to compensate the CPI composition for all this:

Organic Eggs +50%

Coca Cola tins/bottles +20-30%

Toilet paper +30-50%

Full tank of gas +20%

Long term apartment rent +15-20%

Property prices +30%

Construction Labor +25%

Average Hollywood movie shoot/location per day +75%

Firearms +25-30%

Ammo +150%

Average doctor bill +xxx%

Rudolf Hauser writes: 

One problem is the unchanged market basket at a time when people’s buying habits have changed. So one sees declines in such things as airline prices because fewer people are flying but the weight that receives in the calculation has not changed. Meanwhile, prices of many items in demand are rising.



Victor Niederhoffer writes: 

Report on what seems to avalla and me likek pfizer held bak their results.  was   it planned to be after election or did they just report it  late. eitherway, its very suspicious and  certainly affected the electio

K. K. Law writes: 

Need to dig into it to find the truth. It is entirely possible the MSM plus many tech companies including big pharmas are behind influencing the election to make sure Trump lose. As much as the left "wishes" to put the election behind, this is far from being done. It is not until the Supreme Court has made the final decision after reviewing all the submitted evidences and hearing sworn testimonies. I saw the words, "Hear, Hear." Exactly, let us hear what the Supreme Court has to decide and say. The election and the trades are interrelated. There are chances one may have to switch back to "Biden lose, Trump win" trades. We shall see.

Jordan Neuman writes: 

The SuJordan Neumanpreme Court will probably not take the cases.  

Gus Glads writes: 

Pfizer made its timeline very clear from the beginning. Was transparent from the start. The company outlined its process and gave a clear roadmap in October. Read below. Additionally, Pfizer from the beginning has never been part of Operation Warp Speed and has not taken any govt money for R&D.


As for the Supreme Court. Trump and his “legal” team was 0-10 entering today in courts across America  since Election Day as it relates to cases of election fraud and this morning his team’s most recent attempt in Lansing, Michigan Cout of Appeals was rejected by Judge Cynthia Stephens with the following language: “I regret to inform you that your submission is defective.”  The reason being the submission was missing 4 key elements of evidence and support that they claimed to possess.



Alex Forshaw writes: 

1. Is it possible to determine what % of dead people (alt'y, what % of people over 110 years old) voted for Biden over Trump, where they live, and when they last voted? AFAICT, so far, the dead demo is 100 percent for Biden, and turnout was up at least 100 percent over 2016/2012. This was a devastating rebuke to 160 years of shameless GOP voter suppression.

2. More dead voters have voted for Biden than have shown up for all of Biden's campaign rallies, combined. Outstanding GOTV by the Biden campaign here, especially considering that they had no GOTV for most, if not all, other demos.

3.  Dead Lives Matter! Just from sampling social media, dead voters are clearly the fastest-growing demographic in the United States, and Biden's outreach to this underserved minority was amazing. What policies & voter outreach should GOP'ers consider in order to compete for this underserved demographic?

K.K. Law writes: 

If there is a way to quantify voter frauds such as dead people's votes, illegal people's votes and people casting votes multiple times and destroying GOP votes, that would be great. I am sure all these happen but just don't know the magnitude.



K. K. Law writes: 

Tony Bobulinski held presser claiming Joe Biden knew about Hunter's business deals


Penny Brown writes: 

Why didn't this come out sooner?  Wouldn't it have been more effective to drop the bombshell before so many votes were turned in?

Or was it purposively held back to last minute so there were be no time to refute?

Stefan Jovanovich writes: 

The answer is that the smart Republicans in AZ, FL, PA and elsewhere learned from 2018.  They know that you have to let the Democrats vote first so that they can't figure out how many "extra" votes they will need to find on Election Day to overtake the Republicans' "lead".  When the Republicans are behind, there is no way for the Democrats to make that calculation.  Remember, kids, that successful voter fraud is a two-step trade: first, you need the Registrations, then you need the ballots.  Even in Philadelphia you can't these days vote more people than you already have on the voter rolls.  (Oh, for the good old days.)




October 23, 2020 | Leave a Comment

Zubin Al Genubi writes: 

Murakami writes,"convenient approximations bring you closest to comprehending the true nature of things.

Laurel Kenner writes: 

 Also:  Walter Mosley's two series of noir set in LA and NYC, with heroes East Rawlings and Leonid McGill.  Inherent Vice and the Crying of Lot 49, by the paranoid master Thomas Pynchon 

and Raymond Chandler for the ultimate portrait of prewar LA. 

Peter Saint-Andre  writes: 

My wife, who is a big fan of the Bosch series, also recommends the Joe

Gary Boddicker  writes: 

I’ll second the C.J. Box recco, but I’m biased. Chuck was my next door dorm neighbor many years ago at Denver U and a friend. He would disappear into his room (even in the midst of a party) and we’d hear the typewriter banging for hours as we waited in anticipation…out would come a double-spaced, creative, plotted, story…usually things had “gone Western” and the bad guys met a very satisfying end. 

He is a wonderful example of someone who always knew what he loved to do, kept working at it until he got a break, and is now among the best in his field. He’s been banging out one or two a year for many years now and you won’t be bored. Especially appealing to those who appreciate the modern West, it’s people, the outdoors, and a good story. 



Larry W  writes: 

Who wants to watch a game when you know it will be a lopsided victory?

Only die-hards. If you have been told by the MSM your guy, who you are only luke-warm about to begin with, is 10 points up….no need to go vote.

MSM shoots themselves in the foot.!

Gus Glads  writes: 

Larry– I see your point and, to some extent, that explains 2016. 

But it's a different kind of "game" this time around. This isn't about voting for "your guy" to win. It's about voting down the other "guy" because you'll do whatever it takes to ensure that he loses. And the bigger the loss on the scoreboard the better. A much different calculus, which will lead to much different behavior this time around.

Larry W  writes: 

Disagree turn out is based on enthusiasm not hate—look at RR and BObam turn outs as an example  hate/revenge, surveys say, do not turn out voters

Gus Glads  writes: 

I agree Larry but you’re talking about normal times, with normal candidates 

No precedent for what he’s created

Record #s will be recorded this election 

He has dug his own hole and it’s deep

Too many think he has some magic dust that he’s sprinkling — ain’t no magic in that dust my friends.



Election Thoughts

October 19, 2020 | Leave a Comment

Peter Ringel  writes: 

love all of these relative strength thoughts / models.

The market is much stronger than the seasonal pattern

Thus the next seasonal low should springboard a better than usual rally

If trump wins expect larger rally than if biden carries the day (better rallies when party stays in power, thanks JH)

That’s my strategy

I don't known what drove this rally, but I assume election uncertainty is bearish. Since the mkt is not - we have a monster driver in here.

There's a humongous fungus amungus!

 … disprove my fear of a  media/swamp

Wait ! there is any doubt left ? :)

K. K. Law  writes: 

Don't know for sure, but the recent bull trend could correlate with the potential Trump November win. Will see if it will take out the Aug/Sept highs. If it forms a double top and reverses, that would be a different story.




October 13, 2020 | Leave a Comment

Zubin Al Genubi  writes: 

It looks like there are sharp steep drops and no other chance to buy, then an unrelenting drive upwards.  The election discussion, I think, is related and why SJ's call last election was important. The problem, for me,  is staying up all night.

Arthur Khaldarov  writes: 

There were other guys that predicted the opposite of SJ's call and right now we would've been quoting them.

…(obviously, if their prediction came true).

This list can tackle mini problems and become a great source of knowledge. Ideas are dime a dozen, but here we can analyze 3 a week and maybe have some home runs.

Ralph Vince writes: 

There is nothing to prevent others from contributing ideas here, market, electoral, whatever, and the political ones as well. 

there is not a limited number of messages per day or a limited number of topics.

There is however a limited number of people on this list, and only a subset who contribute. This argument rings of being dissatisfied that those who are contributing aren't being interesting enough. Those who have contacted you off list and complained about the electoral discussion have been welcome at any time to contribute all sorts of diverse topics here in addition to whatever is being discussed at the moment.



Fact of the Week

October 1, 2020 | Leave a Comment

George Zachar writes: 

The Manhattan Project guys were all (Jewish) immigrants too. Richard Feynman was a native New Yorker, who grew up in the Rockaways.

Stefan Jovanovich  writes: 

Apologies for not including Feynman; my explanation is that he was a "junior" scientist.  The complete list of scientists and engineers who worked on the thing runs into the thousands.

Dendi Suhubdy writes: 

I’m worried that the Chinese government would win this artificial intelligence cold war to be honest. There are a lot of people who just devote their lives in China to annotate labels and also to code deep learning code in C++.

In Montreal there are probably 400 of us max. And I haven’t seen a precision guided missile using deep learning and simuated reinforcement learning whatsoever. You can simulate multiple times in a simulator that a missile can hit a target, given enough time and computational resources. You then transfer the learning e.g weights from that to the real missile and calibrate.

That would help the missile be guided by literally only a 180 wide angle camera even if it looses GPS capabilities.

The US isn’t innovating rapid enough. Never seen that in a SBIR announcement.



A hypotthesis

September 30, 2020 | Leave a Comment

Victor Niederhoffer writes: 

If  a devil were to cast a spell and  alll  wealthy from specualting and investing would be confiscated, in addition  to the bilious billionaires whoa rare guarding the selfish genese of their progeny, i would say that the market would go  up…  the same reaction to  tehh broe businesses and schooll closure and social isoaltioon  and  propaganda of the resistance and violence that  we see charactirzed by   the  dem leader tearing up the state of union massge.. okay here is the query . why a re investors so self destrucitve that they hope for an inumbent win.  the way the did for the cattle trader? 

Arthur Khaldarov  writes: 

because in the end they make a lot more with someone who is predictable and controllable. What good money is if you can't control/buy power with it? Another boat or a house?

Jordan Neuman writes: 

The market is now predominantly big tech.  Aren't those really Democratic stocks now?



Trailing Stops

September 11, 2020 | Leave a Comment

Zubin Al Genubi writes: 

I would like some advice on trailing stops.  Lets say a guy took a trade, 3 down days, buy end of day, hold for expectation period of 1 day, sell half, set a trailing stop on balance.  Where?  low of day? break even? 20 period ema?  And how is best to move it up.  Low of day? Ema?  Fixed trailing?  I realize it is not efficient but selling at the expectation period would lose a run like last month from 3000 of 16%.   Things seem "trendy" now.  Appreciate any good ideas.  Can this kind of thing be tested?  I doubt it, because normal tests don't seem to catch trends as they tend to mean reversion.  Thanks.   

Sushil Rungta writes: 

I use a % trailing stop.  Usually, once I buy a stock, depending on the stock and the expected volatility, I place a trailing stop anywhere from 8% to 25%.  That way I do not lose any of the upside.  And the % trailing stop keeps moving higher if the stock keeps moving higher.

I am a novice and not meant to be advice.  Just shat=ring what I do

Ralph Vince writes: 

I think it depends on the particular market. For equities, I've found nothing worthwhile that constitutes a mechanical trend following methodology I would risk money on

I have a lot of experience looking for it though! Perhaps  a temporal solution is manifesting in the quities indexes right now, which will oly be evident at some future point in time?

Experience in the markets teaches us nothing, and I doubt it has any value whatsoever. If fact, there is a toxicity to it in that we begin to believe we know something that day one participants aren;t burdened with.

We are tasked with finding which of the 9 sections of the tic-tac-toe board a ball will (randomly) appear in. We choose the center. It comes up randomly in the NW corner. (It must like corners?). We choose the SW corner, it shows up in the NE corner. (see, it likes corners,) We select the SE corner. It comes up in the middle (Ah, two corners, then a middle…..) and on and on ad on. 


"I have a good sense for where that ball will come up as I;ve been doing this for years." Or, better still, "I have a good sense of where that ball will come up - it;s mathematical! It;s somewhat deterministic," (as said the man walking into the convenience store to pony up for his next magic powerball number combination).

In markets, If you find something that works, and is working, it's about to evaporate. This is why I've migrated to longer and longer-term views on things, as it results in a longer time until things evaporate. Everything we think is true in the markets, is a delusion of our own making. Even the notion of drift: in equities, vanishes - first, for  decades or so, then, with the next fall of an empire. The probability of a drawdown, of any given magnitude, approaches certainty as the length of time given for it to transpire increases.

Most things in markets (as in all of life) that are real, often tend to be dull and tedious, require work to get our arms around,  and reside nowhere near where we are looking.

Ralph Vince writes: 

The point is everything we are looking at in terms of timing mechanism is ephemeral. I like longer-term models because they might outlive me (e.g. be long S&P500 when 90 day bills /  S&P500 div yield >1.8, which has batted 9 of 9 since 1980, below) before collapsing. The flipside is a much shorter-term model that will work, until it doesn't, then won't, until it does again!

I have never encountered anything in terms of equitisinexes that works in terms of trend-following, save for the notion of long-term, upwards drift. But as I say, once you are comfortable that something will always work, it is likely near-finished. The buy all dips / drift works in our favor mentality is not immune, but has had the good fortune of being a lugubrious beast.



Experts Never Fail

September 3, 2020 | Leave a Comment

Dr. Zacek writes: 

The population density in Sweden is 25 per Km2 (64 people per mi2).

New York has the highest population density of any major city in the United States, with over 27,000 people per square mile.Just saying.   

Stefan Jovanovich writes: 

That is why they need absolute authority.

Peter Grieve writes: 

Stockholm was doing fairly well, last time I heard. Also just sayin'.




August 20, 2020 | Leave a Comment

Zubin Al Genubi writes: 

Mountain guides are an elite group who guide people into the mountains and backcountry around the world.  They face high risk and uncertain conditions and their job is to mitigate risk while at the same time pushing the limits of their clients to reach higher heights.

A joke among the guides is that the most dangerous situation they can find themselves in is traveling in the mountains with a group of guides.  None of them want to speak up and point out the danger they are getting into for fear of stepping on the other guide's ego, or appearing foolish and other group dynamic issues.  In fact, group dynamics is one of the most dangerous elements in backcountry travel.  Such heuristic issues as who is the leader, fear of being considered scared (when in fact there is danger), fear of looking foolish, expert syndromes, group think, familiarity heuristics, get home itis, summit fever can contribute to disaster.

A lot of the new list members appear to be high level experienced market professionals from the looks of their intro cv's.  Chair is pretty laissez faire, but it's good to contribute without worry.  If you're wrong, someone will tell you how wrong you are here, or the market will, and that is good.  

Jeffrey Hirsch writes:

Eloquent summation Zubin and inspiring. I look forward to discovering and discussing my many flaws and errors



Michael Brush writes: 

So the market got wind of this early and sold off near the close ahead of the announcement?

Futures down post announcement. 

Adam Friedman writes: 

Futures are actually up a little— I think market was nervous it was going to be Susan Rice.Kamala has friends on wall st

Stefan Jovanovich writes: 

The reason I don't trade is that I never, ever understand how "Wall Street" thinks when it comes to political events.  How could the choice of Ms. Harris be anything but a disaster for the Biden campaign?  Trump now has no worries about producing videos that criticize Joe Biden; his campaign can just run the clips from the campaign of Harris accusing Biden of being a racist, sexist…Then they can pull the videos of her being "touch on crime" in California with punitive sentencing for black people.  She comes from a state that the Democrats cannot possibly lose; at least Kaine won Virginia for Clinton.  In the polls that his campaign took before the primary contest with Mrs. Clinton,  Barack formerly known as Barry discovered that one of his serious weaknesses was among African-Americans, many of whom questioned whether or not he was truly "black".  What the campaign discovered was that those questions all went away as soon as voters were presented with images of his wife and children.  Someone who was considered a possible liability for the campaign became the essential partner; that is part of the explanation for how Michelle Obama became "the most admired woman in the world''.   Kamala Harris may be thought of as a "black" candidate by white people; there is going to be considerable doubt about whether black people will apply that label to a woman who is the child of a "mixed" marriage and is married to a "white" man who has adult white children from a previous marriage. 

Let's have a vote from the trading floor; who takes the over on Michelle Obama's being willing to risk her untouchable popularity by publicly embracing Kamala Harris and doing campaign commercials?

Michael Brush writes: 

If anything about the current political environment makes sense, you probably have mental issues

Stefan Jovanovich writes: 

So, MB, is that a vote for the over?



Leo Jia writes: 

If you are in the right factions of the New Class,  it's time to celebrate as you can expect to get a piece of the pie soon.


Kklaw writes: 


That happened in 2017. He was snatched from Four Seasons Hotel in Hong Kong.  All of his bodyguards could not save him from armed CCP agents. The entire CCP is just like a giant mafia. His way to riches is of course through a lot of illegal deals via a whole bunch of connections within CCP. Rumor was that he shorted the Chinese market during 2015 and that pissed Xi off. Therefore Xi wanted to take him down and nationalize his financial empire.  There have been a number of Chinese billionaires who either died mysteriously or were jailed. The morale of this story is the lieutenants of the mafia can get rich and stay "free" until the head of the mafia feels the person is a threat. If Xi feels any of those billionaires is a threat to his empire, the person could be be whacked (i.e., died accidentally) or jailed. And the person's fortune would be the country's (should i say Xi's or his cronies') possessions.



Tom Ford writes: 

Should we be sanctioning Georgia?


Actually my comment was not meant to debate on covid numbers. Everyone will have different opinions on whether the virus is really re-surging. It depends on how the virus affected you (financially, personally, and politically). I found it interesting how we are accusing China of fake numbers (rightly so, i don't believe it either) when we may potentially also be doing the same thing. It's funny lately how some of the actions taken by our nation looked exactly like the things we've condemned China for. But hey, do as I say, not as I do….right?

Ralph, sources wise, we can debate till the next millennia what constitutes credible sources. Credibility most commonly depends on whether something sounds confirming for a reader (confirmation bias). If a news piece provides information that is inline with a reader's political affiliation and/or personal philosophies, it is more than likely the reader will find that news credible. I like to find things to read that don't agree with the general public's views because it allows for a more holistic understanding of the parties involved and their agendas. Kinda like stepping in the shoes of someone else. Its not going to fit, literally and culturally. Thats why I encourage people to go read news published by the CCP and contrast it with our own nations news. That way you can really understand what everyone's action may actually entail. The problem we have right now with China is a difference in culture, a way of life. Until we really dive deep and understand each other culturally can we ultimately find a common ground. 



Hernan Avella writes: 

A Fearful Asymmetry: Covid-19 and America’s Information Deficit with China

David Moser

July 11, 2020

Volume 18 | Issue 14 | Number 5

Article ID 5422

Abstract: There is a longstanding and fundamental asymmetry in level of mutual understanding between the US and China. Chinese citizens are avid consumers of American media and cultural products, whereas most Americans are woefully unfamiliar with even the basics of Chinese history and culture. This asymmetry has resulted in a situation where the US is in danger of misinterpreting or misunderstanding Chinese motivations in bilateral relations, particularly in times of crisis. This paper recounts how the Covid-19 epidemic of 2020 exacerbated existing tensions between the US and China, and how these escalations in state-to-state conflict were ilarge part due to America’s information deficit with the PRC.



Jeffery Rollert writes: 

The article reminded me of old Cold War articles. Clear local perspective, and cold lanuguage discussing hot topics.  I found the premise to be thoughtful and well explained, but it seemed clouded by reaching to far from it.

K. K. Law writes: 

The author completely missed a very major point and that is likely the result of him also only having very superficial understanding of China and CCP. The author fails to account for the key role of CCP's propaganda machine which controls what the Chinese can read and see and also controls what kind of information and mid-information is allowed to be sent to the West.  The CCP has perfected its machine to control the minds and behaviors of Chinese inside the country since 1945.

Stefan Jovanovich replies: 

1948 would be a better date.  Until the KMT outlawed ownership of gold and imposed price controls - which ruined all remaining exchange value for the currency, the Maoist insurgency had no guarantee of winning.  As usual, the "conservatives" in American politics picked the wrong villain.  The communists in the State Department had little effect on the outcome; the sensible bipartisan financial experts are the people who "lost" China.



Leo Jia writes: 


Jayson Pifer replies: 

There has been a series of those videos coming out, pre-covid anyway.   I believe propelled by the eruption of MMA in China and it's suppression there by the traditional martial arts.

Turns out the winner of these bouts are consistently the ones who train for the ring against actual opponents rather than their rank achieved in their Art.

I'd suggest the same answer applies to the Special Forces versus Martial Artist question.  The answer wouldn't be their employed technique, but the effectiveness of their training and it's applicability to the rules, if any, of the fighting arena.



I just had a nice chat with a German recruiter/headhunter.

I ask her about the current German labor market and how this (convid-
)summer compares to last year's summer ? I asked because I don't see
much difference on typical headhunter sites - lots of offers and job

She commented, that the labor mkt is quite different now. Many employees
work part-time and/or from home. Many are also satisfied with lower
wages ( as a result of part-time work) in exchange for more free time.
Many plan to keep working part-time.

I expect productivity or crater here. This is on top of a dried up
workforce even before the virus. Now many are also lazy. Such a move to
part-time does not happen gradually, but seems to occur herd-like.



Good stuff:  https://fraser.stlouisfed.org/75years/presentation.php




July 11, 2020 | Leave a Comment

Victor Niederhoffer writes: 

are you doing  and how is millie doing…'2 what is your reaction to all the police violence lately .d o you feel it shoudl be defunded?  3 artie said  that during  his tenure it wa s     aomost mpossible to arrest a b lack personage because  eveyone was loookign at you a skew.

William McCarthy replies: 

Hello Victor,

How are you doing?  Millie and I are hanging in there.  Plenty of doctor visits for the both of us.  But all is well considering.

The only thing different about the police violence today compared to the past is media technology.  Cell phone video cameras and the internet.  These recorded criminal acts by police unfortunately have always occurred by some rogue police officers that were denied. There is no justification for what was witnessed in the Minneapolis incident.  I feel for the 2 rookie officers that were present who were also charged.  There lives were ruined before their law enforcement careers even got started.

It seems that physically resisting arrest has become an expected allowable standard practice on the part of the public.  Resisting even a unlawful arrest is against the law (at least in the New York State Penal Law). The citizen's recourse is to submit to the arrest and make their claim of false arrest in court.  

The police have little influence if they are not supported by the general public.  And without the public's support they are personally discouraged from self-initiating any enforcement activity.  No one can know in advance the outcome of an encounter.  The public has been falsely educated by all of the popular TV shows that depict the law enforcement main character's swift and facile physical actions.  In real life it can get ugly fast even when the actions of the police are lawful. Few ordinary officers are prepared to make it look easy. That requires constant physical training and technique. On television the "good guy" always wins.  That is not the case in real life.  

Can society survive without the acceptance of the rule of law by the public and its enforcement by the police?  There would be little to video if the public did not physically resist arrest!

Victor Niederhoffer writes: 

do yoou agree with me that the strength oof the unons makes it    almost impssiblet ofire ann officer, and no knock lawas and qualified  immunity and  oikuce nilitary equipment, and  juries favoritism to olice   needs reform. very glad to hear of  your consilience, we are abotu the same as y ou and Millie. moved out of ny. no good reason to stay for us without broadway and restaurants, just reread the Gofrather . wata is realistic?.

Victor Niederhoffer adds: 

billl mccarthy  was a friend   and student     of my father    andn chie fo the bomb and couter  intelligence dept, and  made more arrewts than anyone with his patented method. loved to biox. his book is the best crime book ever

Ken Drees writes: 

 The Godfather types will move into cities that let their police forces shutter and then there will be the peace



Last weekend I have completed a transcontinental travel going from Las Vegas > Los Angeles > Amsterdam > Prague.

Prior departure Delta & KLM did bombard me with docs to fill out for the trip and plethora of entry and in-flight requirements.

Vegas: almost empty airport, 99% people in masks, at about 10% of normal capacity in terms of people traffic, 1 newspaper shop open, everything else closed. West Jet flight – small Embraer plane with about 30% seats taken, comfy free mid seat arrangement, 2 people in 1st class, refreshments placed on your seat in a Ziplock bag, no service throughout the flight. Masks required on the plane during the whole flight.

Los Angeles: no transit working, had to exit the domestic terminal and walk the curb to the international terminal, 14 flights on the monitor for the whole day, destinations as such as Mexico, China, Paris & Amsterdam. Terminal completely closed except 2 newspaper shops, departure terminal complete ghost town, passengers only for my and another China flight, both relatively small planes Boeing 777-300. Passengers ranging from full-on hazmat suits, masks & shields for ICU units, to scarf over the face and only when specifically requested by the personnel. No tourists-type travelers whatsoever. Flight about 35% full. Refreshments in Ziplock bags on the seat, except 1 hot meal (hot oats with marmalade – seriously, I kid you not) mid-flight, no in-flight service as well. Masks required on the plane during the whole flight. Big fuss about several forms to fill out before departure which will be requested upon arrival in Amsterdam. People using 1! pen provided by the gate attendant.

Amsterdam: no one asking for the tons of paperwork we were forced to fill out, no temperature check at all, no in-person questions inquiring where you landed from. About 80% of the airport in masks, terminal capacity at about 25%, all shops open including high end jewelry and designers.

Prague: airport at about 20% capacity, baggage delivery at record breaking 10 minutes from plane docking at the gate. First time border control staff asking where I did land from, even though I did land in Schengen terminal, meaning there is no border control in normal circumstances. 99% of people in masks inside buildings, outside no masks.

Every single flight except Prague had bus transfer to plane location, no direct gate access – perfect petri dish environment to get the virus.

Czech legislation allows to have the test up-to 72 hour after arrival as long as you self-quarantined home till the test results. Alternatively you can arrive with test results done max 4 days before departure. In Arizona the current test result delivery is up-to 10 business days with up-to 5 days wait time for the test exam as such. In Prague I did have it 24 hours after landing, to capture the trip exposure. I considered the risk during the transit much higher compared to being tucked away in my home in an small town in the middle of the Arizona desert. PCR test results took 6 hours, based on which I sent an email to the authorities and released myself from the quarantine.

Let's see how the experience will be in about 5 weeks when I fly back to the USA.



3 times the chair has sunk the prez with terrible prepared remarks. Lets the cattle trader spoon get ahead of the prez in the betting odds, Mr. Kudlow should take the Cat to the Chair and tell him that's not why he was made Chair. He was supposed to be diplomatic. We know he doesn't know anything about monetary or economic theory but at least he could refrain from a fourth strike.



"41% of businesses closed on Yelp have shut down for good during the coronavirus pandemic"

This article may be one of the evidences that the next shoe or shoes to drop. I have seen yelp report on 26% of fitness facilities to 53% of restaurants listed on yelps that have been closed forever. Regarding the US-China deal, I don't believe CCP will hold up their end of bargain. But then it is a ultra-small potato, in comparison to the significant loss of lives loss and the unprecedented impact on the US economy caused by the Wuhan virus.

If Trump wants to sing the praise of signing of the trade deal or use the per-pandemic economy and wants to get reelected, he is grossly mistaken. Whatever playbook he used to win 2016 won't work this time around given the current pandemic-driven unprecedented downturn. Just don't know who is advising Trump on his reelection campaign. Whoever they may be, they all need to be fired. Whoever running the campaign needs to adapt and modify the campaign quickly. Running for the highest office against one's opponent is like MMA competition in the UFC. It needs a well-rounded fighter. Just being a strong striker or 10th degree black-belt jujitsu expert can't enable a fighter to win the champion. It needs a strategy to adapt and change according to the opponent and the surrounding circumstances as well. In the mean time, I am buckling up and brace for the impact of having Beijing and dementia-stricken Biden in the White House, and the Democratic-controlled house and senate. I would like to be proven wrong, but until there are new data to show otherwise, that is what I envision for the time being.



In the end, they will push hard (HARD) for mail in ballots to ensure their (liberal) victories. I wouldn't be surprised if they try to do almost all mail in ballots. There will be a major ramp up of fear. We'll see a major spike in cases and deaths blasted out from the media and the democrats will in congress will be all over the news trumpeting doom and gloom and the end of civilization as we know it and that we need to close down the polls and do all mail in voting)

Anyone who doesn't think that there is a huge opportunity for fraud with mail in ballots is just disingenuous.

Heck, even if the non-liberals were pushing for mail in ballots, I would be saying that that is ripe for fraud.

I would be suspicious of any group that is pushing for mail in ballots. Why? Because that means that they are prepared for it. Prepared in a fraudulent way. I would say the same thing if non-liberals were pushing for it.

We're being played by TPTB and the useful idiots are lining up to worship at the altar of liberalism. And those of us that don't line up to worship at their altar will see the modern day version of Brownshirts unleashed on us. We've gotten a taste of that already.

anonymous writes: 

We've had mail in ballots in CO for years. I'm not sure mailing in versus filling out a ballot in person changes things dramatically when we think about fraud. Fraud happens when what was dropped in the box doesn't match the results.

Voting seems like a great way to use blockchain so a person can trace their vote and see it be counted anonymously. That may a leap too far, but it (on the surface) could solve many issues of fraud. Smarter people than me feel free to chime in. 

Brian Mulvihill writes: 

OSTK-backed Voatz has been garnering momentum on blockchain voting over last year.



The only thing different about the police violence today compared to the past is media technology.  Cell phone video cameras and the internet.  These recorded criminal acts by police unfortunately have always occurred by some rogue police officers that were denied. There is no justification for what was witnessed in the Minneapolis incident.  I feel for the 2 rookie officers that were present who were also charged.  There lives were ruined before their law enforcement careers even got started.

It seems that physically resisting arrest has become an expected allowable standard practice on the part of the public.  Resisting even a unlawful arrest is against the law (at least in the New York State Penal Law). The citizen's recourse is to submit to the arrest and make their claim of false arrest in court.

The police have little influence if they are not supported by the general public.  And without the public's support they are personally discouraged from self-initiating any enforcement activity.  No one can know in advance the outcome of an encounter.  The public has been falsely educated by all of the popular TV shows that depict the law enforcement main character's swift and facile physical actions.  In real life it can get ugly fast even when the actions of the police are lawful. Few ordinary officers are prepared to make it look easy. That requires constant physical training and technique. On television the "good guy" always wins.  That is not the case in real life.

Can society survive without the acceptance of the rule of law by the public and its enforcement by the police?  There would be little to video if the public did not physically resist arrest!



 I'm working on an hypothesis on Sweden and it's economic impact.

The FT has few articles on the way they are treating the covid but given that I do not have an edge on that I m more focused on second level thinking i.e

Sweden is the opposite of Italy from an economic standpoint high private debt (companies and private are highly levered) low country debt.

Riksbank stretched its mandate and there is a parliament earring to try to limit its intervention.

The economy is exporters based and employee costs are elevated (We are talking around 70% tax rate) due to highly "social" economy employees are covered for 6/9 months Va Italy 6 weeks…

They have kept almost 80% of the economy open but if you do not have external demand … who you are going to sell to?

Nevertheless the Omx is one of Europe best performer indexes…supported by a depreciated currency .Theoretically if you plot it against skeusd you will see that the relationship broke down around 2yrs ago according to this metrics it should be trading at half the price.

Add to this the real estate market which is creating a bit of headache on the ground.

All this to layout the conclusion that they could not close the economy without intervening directly on the private debt market.. which given the low level of country debt they could have done… but they preferred no to…

Hope I was able to add few point to your thinking process.



Folks here are running out of money for food. Unemployment web site is nonfunctional. They just extended shut down another month. Something is going to blow up soon.

K.K. Law writes: 

I don't have any proof and yet I always wonder whether that is part of CCP's multi-prong game plan that uses the Coronavirus, among other objectives, to create some form of limited-extent slow and steady self-annihilation within the US. While jury is still out whether they released the virus on purpose, and yet certainly they would not let even an accidental crisis go to waste. If this is a provocative speculative allegation, then so be it. 

Ralph Vince writes: 

Now I see the good Governor of MI has extended the lockdown for another month.

I'll stand by me earlier prediction, there will be bloodshed at that Capitol over this, that's but a formality now. The question is how do the governor's of other besieged states react.



Gilead arguably has the best science in the business. But success in Biotech / Pharma is reserved for those who keep their customers alive, but milk them forever by not curing them of anything.

Hits against Gilead:

1. Gilead did not make any friends by creating the Gardasil vaccine for HPV, which killed the downstream pipeline for those companies that would have treated HPV for 40-50 years.

2. Gilead does not have deep hooks inside the FDA either

Regeneron on the other hand has deep contacts inside the FDA and also practices the milking-forever business model. If they package dried-prunes as a cure for Covid, FDA will merrily approve it.



 Sheltered Specs,

Thought you might enjoy this talk:

"Roland De Wolk and the Scandalous Life of Leland Stanford"

Sushil Rungta writes: 

Very interesting.

Just ordered the book also.

A subject of great interest to me.



Looking at Dow Jones there have been 17 declines from ATHs since 1900 over 22%. Only two have recovered high within 1 year. 1990 and 1998 had declines around 22% and recovered within 1 year. 1917, the year preceding the Spanish flu recovering the all time high took 2 years.



I'm also wondering about real estate. Here there's a moratorium on evictions, a moratorium on foreclosures. Naturally no one will pay either rent, especially rent, or mortgage, because they are out of a job, and the unemployment fund is dried up.

That puts pressure on the banks, and so on down the chain.

Ralph Vince writes: 

Yes. This is why I think the virus is NOT a problem to be concerned about. Everything is downstream from everything else, in a giant circuit that is the US economy.

It cannot be started simply by reversing the order of operations form which it was stopped. Some fraction of the machine will inevitably be "amputated," I fear, and never re start.

I wish I knew what size that fraction is.

Peter St. Andre writes: 

The following is speculation, but it seems to me that much of the retail sector will not return to "normal" for at least 12 months and possibly as much as 5-10 years because apparently a vaccine will be difficult to create and distribute (the previous record for developing a vaccine - for Ebola - was 5 years [1]). You can write off theatres, music clubs, and the like. Museums and gyms and restaurants and salons and such will be severely challenged and perhaps unable to generate even 50% of their previous revenue because of persistent social distancing and the fact that many former customers will simply stay away. Some of this activity will move onto the Internet, but many of these organizations will cease to exist. Will anything take their place? That seems unlikely, which means it seems likely that retail rents will plummet ~50% too, leading to widespread bankruptcies in the commercial real estate sector. And this doesn't count factories, office buildings, and so on. What are the downstream effects on REITs, banks, pension funds, property managers, service companies, etc.? Others on the list are more expert in these matters so I'd love to hear their perspectives.

Peter Pinkhasov writes: 

If one had to throw darts I would think major consolidations in retail, airlines and O&G coming. Big winners are still middle-man removing; anti-cartel tech giants.

Ralph Vince writes: 

None of this stuff you fellows are discussing are part of the major backbone of American manufacturing though — what you are mentioning, even airlines, are not even complicated processes.

I'm talking about, say, large, design- engineered products, often one-offs like huge power transmission componentry involving oddball power transmission devices ( say, rotary actuators) that, say, operate in unusual environments, involve many complex comppnents and engineered upstream.

So if the more simpler services of the economy will struggle to reopen, how will the manufacturing backbone, comprised of it's own, interdependent, rather circuitous food-chain, stand up this decade, or ever? If things had been lost to globalism, the propensity for more of that will be far greater now by sheer necessity.

K.K Law writes: 

"COVID-19 is attacking our defense supply chains and our nation's security"

Gordon Haave writes: 

Covid 19 isn't attacking them. Human decisions are.

Julian Rowberry writes: 

Exactly Gordon, the same goes for the recovery. It won't be held back by complex physical limitations, it'll be limited in varying degrees in different segments by human decisions (red tape, regulations, access, sentiment etc).

The two areas I see that are going to do well are those with political clout to enforce the flow of decisions in their direction. These segments will be hard to swim along with because they will be able to front run, maintain and work their syndicates. The other is those who are who break the paradigm with new ideas, businesses & services, that the gatekeepers don't see coming until it's too late.

Easan Katir writes: 

Anecdote, pointing to a trend ahead:

A business-owning friend voluntarily quarantined on his yacht in Sausalito called to talk about money. He said he had just had a zoom staff meeting, and everybody said they liked working from home, and hoped it would continue.

So among other effects, the govt decision to shut down accelerates the work from home trend. #WFH



 I wonder if meat is going to have similar problems as crude as someone here mentioned with the meat factories shutting down. Similar carrying issues. I'm vegan, so not too worried, but it could be a problem for markets and food supply in general.

Brennan Turner writes: 

I think the challenges in meat markets is just a blip and oil markets are not the best comparable.

Long answer: Meat processing plants will open back up as entire factories get sanitized. In the meantime, 3 options emerge for the remaining animals:

1.    Only cattle can be grazed (cheapest option for beef farmers but not an option for hogs or poultry)

2.    Put on low-weigh gain/maintenance rations (still expensive)

3.    Or be culled: 100,000s of animals (if not millions) in the U.S who are supposed to be moved to said plants but simply can't now. Any of these options represent a significant loss for the livestock producer. As plants open back up, in order to reduce COVID-19 contagion risks, it's unlikely they'll be going full tilt (maybe closer to 60-70% of capacity).

As a result, I believe a few scenarios will emerge in the coming weeks:

 1.    Those who can pay more for meat, will continue to do so, but with more and more people on the unemployment line, this number will drop which would lead back to lower meat prices in the medium term (I.e. 3-6 months).

2.    We're already seeing an increase in demand for the local butcher and thus, one area I'm watching closely is the D2C game (Direct to Consumer); I've already seen a few of my cattlemen friends around North America kill a few of their own animals destined for the plants, but instead of just dumping carcasses in the manure pit, they're capturing the surge in D2C demand from their local consumers. And yes, dumping animals in the manure pit is often how they're disposed of…great organic fertilizer for the crops!

3.    With less animals to feed, and/or animals on smaller rations, this is a significant hit to the feed line item for grains and oilseeds. Cash corn prices in many areas of the Midwest (usually the corn demand epicentre) are already below $3/bushel thanks to an ethanol market that needs 50-60% less corn than 3-4 months ago! Considering that less than 10% of farmers actually hedge in the futures markets, this means a lot of farmers are swimming pretty naked right now. My last point echoes Mr. Vince in that that the ripple effect will be deep and long. Small-town America in the agricultural heartland could see significant demographic changes: farmers can't afford brand new equipment or trucks or even eating out in town 1x/week with their family…lots of these local businesses depend on, at bare-minimum, a break-even agricultural economy and, without it, they won't be able to weather the storm coming).

Not to patronize any of the List, but this will be a major reset of the scales in the agricultural landscape. I think there'll be major regulatory changes to the meat processing sector i.e. in a intense twist of irony, I could see it moving to the extreme opposite of Chinese wet markets. Further, there's going to be a lot of blood on the streets and I'm skeptical that any bailouts for farmers won't be enough for many. Here in Canada, the government is only lending more money to an already over-leveraged farmer (but students are getting $9 Billion or $1,250/person/month, no strings attached!!!)

I left NYC in 8 years ago to go back to Saskatchewan and help my family's farm be a little more structured/professional. This spring, we plan to seed ~55,000 acres in Sask and 20,000 acres in North Dakota (combined, ~5x the size of Manhattan). Agricultural markets are unapologetically cyclical (as are almost all commodities). What we're seeing now is the exact reason I implemented some serious SOPs and a somewhat overburdening pay down of debt during the good times of 2012-2016. However, because we've done this, we'll be able to weather the storm financially, no matter how bad it gets. The high-interest rate environment of the 1980s continues to come to mind, although I haven't had a chance to dig into the all various ripple effects back then, but I think there could be some similarities.

Bottom line is that, much like many other industries, the agriculture's big players will get bigger as the under-capitalized and under-prepared have to throw in the towel (be it now, or when the further over-leveraging catches up with them). I'm undecided if we want to expand our farm further, but it's either that, or all the pensions and endowment funds will buy up the land around us (assuming they've got pocket change to play with still), and the farmer is toast in the long-run over impossible cash rent costs. Thus, to respond to the conclusions in the Bloomberg piece, the U.S. will not be alone in this restructuring of agricultural economies.

Stefan Jovanovich writes: 

Questions for BT: Could you explain why you think the cash cost for rentals will go up? Don't the consolidations suggest that there will be fewer smart operators like you and more absentee landlords like the British Land Companies in the last third of the 19th century? 

Brennan Turner replies: 

Institutional investors always have deeper pockets than the local farmer/investor. And they are far from absentee landowners, as many have ESG requirements these days and are very protective of their generational investment. (They're not making any more land!) Ultimately, there's way less leniency and whoever can pay, will usually pay. Land ownership/operator has gotten fairly ruthless these days.



What are everyone's thoughts on this? It's down 50+% for the day already.

R. Dirani writes: 

The narrative has not changed. Pressure of crude should continue. Demand destruction has occurred to a great deal. Demand will take time to come back. 



"Department of Justice and Department of Health and Human Services Partner to Distribute More Than Half a Million Medical Supplies Confiscated from Price Gougers"

Victor Niederhoffer writes: 

The speculator as hero. The siege of Antwerp.

Rudolf Hauser writes: 

For the private sector to inventory supplies, etc. for potential future periods of shortages requires a return for their investment and the risk that such shortages will never happen. Someone or some organization should be able to charge higher prices during such a shortage so that they precautionary investment will be rewarded. That will encourage such future behavior to be warranted. There also is a worthwhile function when someone buys large amounts in areas with adequate supply in order to make then available in areas of shortages.

From a demand standpoint, pricing insures that those who get the most value from a scarce product will be buyers when it comes to most goods and services.

But things are different when after a crisis is clearly at hand, someone purchases large amounts with the intention of cornering a market and selling at inflated prices. Nor is price a fair distribution mechanism when it is a matter of life and death and it would have maximum utility for all and the ability to purchase is limited by the means to pay at one's disposal. The most basic human right is the right to survival in oth non-human animal world and in the human world. Any enforcement against price gouging should be limited to such agents, not those who purchased before a crisis situation was well known. Nor should agents who purchased before a crisis be forced to sell at any point in time. It is in their advantage to sell when the shortage is greater. If they hold off selling, it may be because they see an even greater need in the future, and they might just be right. In that case society would be better off if they hold off selling. When the future is so uncertain, better more judgements than fewer making such decisions. 



A few of us were around during 1960-82. These were bad years in the US. There were riots in the cities, the Viet Nam war, presidents were assassinated, impeached, there was a serious threat of nuclear annihilation. The stock market ranged up and down 40% for close to 20 years. The 70's were especially bad.

Hernan Avella writes: 

Everybody anchors to the familiar, to the period of time that fits their model of the world or their desires. Ray Dalio thinks we are in the 1930-1945, Stefan thinks we are in the 1920's, Ralph Vince thinks this is 1987… I don't feel very confident in any narrow set of outcomes outside minutes or hours.



 April 9th:

The best advice on the stock market during a "bear market" is contained in a book by Frank Kelly Why You Win or Lose: The Psychology of Speculation written in 1930 by a man who played the market during the 1929 crash and after and profited.

The advice is "the wrong behavior is almost sure to be seemingly logical behavior". Indeed one of the most charming things about the stock market is that one may prospect there by being illogical. The few who contrive to take more out of the market than they put into take more out by by going contrary to what would generally be accepted as logic. They do the opposite of what seemingly intelligent speculators are doing. Kelly gives many examples of this for the 1929 crash. Stocks go down on good news and up on bad news. A stock announces a dividend (earnings beat) and goes down but it rises when the dividend decreases (earnings masses) and goes up. Many other examples are given as to why the public buys stocks when the prices are near the top and sells them when prices are near the bottom.

No better example of the value of the illogical is given by the price behavior this week. For example, today. Friday March 7th, unemployment was at 8.5 million and 8 million more claims came in. What a time to take advantage of the coming carnage than that

At the beginning of the week the surgeon general reported that this would be a disastrous week or the hell of a week. Dr. Fauci in an interview give his usual prolonging the likely course of the recovery and downplaying the host of a cure within 4 months (why don't they confine him to jogging around a forlorn and distant track while others try to salvage any hopes of recovery). The drum beater of bad news continued during the week with headlines about retailers coming failure to meet debt payments and even online marketers were hurting because although views were up, advertising revenues were way down. Hardly a nook was spared. Typical was the highlight that airline leasing companies were in jeopardy to say nothing of the layoffs in Boeing and all travel companies.

No wonder the market has its best week in 48 years and that it is now 30% above its previous low. A content analysis of the negativity of news or headlines in the media this week would show this was the most negative on record. The WSJ was almost as negative as the NYT if that possible.

Is there any solution for succumbing to this all to human proclivity? Yes. A study of numbers will help. One example, it was 40 or so days without the stock market hitting a 20 day high. Such extended durations without a drink (or romance) are rare.

They have an expectation and Sharpe quite in line with what transpired. I could give many other examples. For example the big Friday decline that preceded the biggest rally ever. You have to be illogical and you can't assume that what happened in vivid memory continues.

Typical of all the bad news on the virus front was the number of new deaths and new reported incidents in NY reaching a maximum. (When will the common man understand that the more they test the greater than number of new virus will be found.

And the news that the after effect of ventilator cures are likely to be worse than shuffling off itself. As a benchmark the number tested is less than 10% of the population in almost all areas. The constant increase in the areas under lockdown and the extension everywhere. How illogical can you be?

T SUBSCRIBER 1 minute ago: "What we are doing is working," Dr. Fauci told reporters Thursday." Um, excuse me Dr. Fauci, you and your sidekick are strangling the economy of the US based on your euphoria over of this "pandemic". Mr. President, do what we elected you to do.

For all those against reopening the country until things are perfectly safe please educate yourself: (cont)

One more thing. Companies like Fedex and businesses like the professional sports have say 600,000 workers and the death rate is less than 10 deaths. How have they done it. They take care and use their common sense to distance.

Take manufacturing jobs 19 million or so. They are all used to tight work rules and restrictions on distancing. They would use choice and common sense to resume their jobs and pursuit of happiness. How did Mencken, Nock and Rand predict that we would give up all our liberties with a whimper.

What's amazing is that Kelly was able to profit by swing when commissions were so high unlike Livermore he was not born to commit himself in the Netherlands (never go near 62nd street). His swinging at least was with a several month holding period usually without margin.

Kelly didn't use margin and his average swing was 3 months hold so he didn't vig himself to death.

Follow @VicNiederhoffer on Twitter for more



The alleged reason why there is no more Coronavirus related deaths in Wuhan.



Deception in markets as in nature is business as usual. The geopolitical balance among global competitors (Russia, China, US) has been changing over the past years. The virus provides elements for an acceleration to this process. Quite significant are the implications in the EU because of the virus and the consequences mainly for weak economies like Italy, Spain, Portugal, Greece. If the Europeans do not find cohesion and solidarity, the Euro might be at risk. China is using its soft power to influence relationships. Russia is interested in the disintegration of the EU to regain influence in Eastern Europe and undermine NATO solidarity. Quite significant that China and Russia are offering their aid when nations in Europe are closing their borders and every one is focused on their self interest. Challenging developments ahead.



  It appears now, we should be thankful that the Chinese got their shit together (by whatever means necessary

Dylan Distasio writes:

I wonder where all those missing cell phone users are…

Some may be in here.

K. K Law writes:

Someone sent me a picture of people lining up outside a Wuhan funeral home to retrieve the cremated remains of their family members. Here is an unconfirmed rumor. Each funeral home could only handle releasing 500 cremation urns per day. Don't know why they can' handle thousands per day. By one estimate, they would not complete the cremation ash delivery process before Apr 4 (their Ching Ming Festival). A ball park estimate is each funeral home could at least deliver about 6500 urns by Apr 4. There are 7 funeral homes in Wuhan. Probably another circumstantial evidence China grossly under-reported their cases and death tolls.



An old spec in early 1900 wrote that panics cause markets to fall by 30% that tend to reverse by 1/3. Looking at the S&P this would put us to roughly the area we are now. Is there any scientific evidence to this claim?

anonymous writes: 

Fibonacci retracement to either 38% or 62%? Pretty natural for a shock, like the action of a released spring. That's only for the short term.

In the intermediate to longer term for the current case, stocks (in the US in particular) are expected to go higher.

Four reasons: 1. The virus or at least the scare or the impacts of it will be negligible in a couple of months; 2. The unprecedented rescue packages will kick into effects (inflation or consumption); 3. The very likelihood of a war will intensify; 4. The world will not be the same, but innovations in a lively economy will again realize high growth.

anonymous responds: 

Could you comment on why you think the probability of a war will increase?

anonymous replies: 

First, China rulers need a war to shift internal tensions. Attack on Taiwan is very likely during this introspection period in the world. They might have actually conspired for this opportunity.

Second, the huge demand for China to compensate for world losses will very likely lead to war.

Third, if the world find out that the spread of the virus was planned, a war is inevitable. 

anonymous responds: 

Thanks. Concur with all three arguments. If China decides to invade Taiwan, chances are they may may have first preemptive strikes against some US capabilities in the region as the US will for sure intervene to blunt the aggression against Taiwan. There are four US carrier strike groups in the Pacific. Never have had so high a carrier strike group concentration in the Pacific since WWII.



 I went to the local Bauhaus store (like Home Depot) to buy a LED mirror for the new bath room. I mentioned to the sales rep that I was surprised to see the parking lot quite filled, considering empty streets and this being the weekend before the monthly pay check. He was also surprised and told me that the manager had said they were only a bit behind budget, but ahead of last year. So they were happy.

In fact they are not the only ones happy. As my friend Mr. F.A wrote me, the air planes are grounded so the Green Party is happy. The borders are closed, so the Sweden Democrats are happy. There are tax cut backs for companies, so the Conservatives are happy. Places of sin, like bars and restaurants are closed, so the Christian Democrats are happy. There is talk about nationalizing industries and empty shelves at stores, just like in Venezuela, so the Left is happy. In summary–we are all happy.

I wish good health to all of you.




Yesterday Amazon announced the need to hire 100,000 workers to support additional package deliveries.

The link shows you the chart of the decline in payroll tax growth since the outbreak. Hint: there isn't any such decline. But we will continue to monitor. It will be interesting to see what happens in the next 2 weeks. N.B. this is daily data.



If there's one fact about the current trading environment that is unassailable, it's that one can't read anything into the daily swings. One can assume that the rallies are underpinned by mechanical hedge flows, and not a renewed optimism about future prospects for economic growth.Theses moves are often violent, especially into the close; but are always sold into, and short-lived.

The problem with trying to resurrect the market is that it was extremely overpriced in the first place. The drift ain't no +30%. CEO's were more concerned about managing (bonus linked) share price than managing their company's business. Now, they are paying the price. Also, years of suppressed vol allowed money managers to lever up ever more, leaving a market built on a foundation of greed, debt, and leverage.

Economic shock is still expanding in both scope and scale; and nothing is getting fixed. Until they address credit, corporate cash flows, and lending disruptions( per Mr. Rollert), sustainable buying will not re-emerge. Additionally, heightened levels of vol reduces the pool of potential buyers, leaving only fundamental/discretionary and VaR insensitive investors left to re-allocate.

Hernan Avella writes: 

It's tough out there when even the true experts are feeling it:

"Williams declined to say which trading firms are involved in conversations pressing the banks to increase available capital. When market-makers stop buying and selling, markets can sometimes seize up and undercut investor confidence in financial markets"

anonymous adds: 

This is the same refrain as ever. The Citadels of the world push for pay for flow dark pool friendly regulation in normal markets, and then shut down their APIs once there's some vol so that flow adversely selects whatever is on the lit markets.

These articles are all lobbying. One simple way to increase the liquidity of the market would be to give time/price preference to lit Market Makers all the time! Let's see that get regulatory traction.



I'm avoiding BA like the plague, but there are some incredible buys out there now…you don't even have to look at oil, looking at Visa here at 140…among 20 other big names.

Gary Phillips writes: 

Getting too old for this…bought spooz 2289-94 per your brilliance, and will be looking to add if it holds.

Ralph Vince writes: 

Alcoa…Dow Chem… UTX…you think these earnings are going to be impacted to ANYTHING of this degree? Wait to see new unemployment claims tomorrow morning…FB…AMZN…if you really want to be the king of nerve, PBR…

I got to keep buying into this or I'm going to be the king of chumps come the 3rd & 4th qtr.

anonymous writes: 

Respecting to the fullest Vic's prohibition on any kind of recommendation. I just want to put out there that many ETDs are half of their early February values. So for example TDS(Telephone and Data Systems) has 7 ETDs TDA, TDI, TDE, TDJ, UZA, UZB, UZC.

Whatever you think about TDS in the telco space, the common is holding up, but the debt got clobbered in forced selling and it now yielding ~12-15%

Just fyi not a rec, just b/c not much focus on ETD here.



There's been a lot of panicking and fear mongering happening on this list. First time I've seen it in my 15 years on the list.

Peter St. Andre writes: 

It has not been my intent to spread fear or foment panic. I shall wait at least 2 weeks before posting to the list again.



My own personal theory is that people (on both sides) were so tired of all the idiotic political bickering, divisions and stupid name calling, they were ready to embrace something, anything, that would unite us and make us feel like a country again.

Heading right into what promised to be the worst election campaign season ever for stupid political bickering, childish name calling and personal attacks, coronavirus popped up as that opportunity.

So people embraced it!

And everyone is relieved to find that we can actually still be a unified nation working together again. We all needed to know that. (The same dynamic exists in most other countries with the rise of populism etc.)

Why wouldn't they embrace the corona unifier?

Is there anyone on either side who is not tired of the political bickering, petty name calling and nasty personal attacks (including on this board and in the fake krs) and hungry for a way out of it?

On the irrationality of the Coronavirus Mass Mania:

It is obviously an irrational mass mania on the surface to anyone who has studied manias. Just looking at people's behavior (selling stocks down like crazy, hoarding toilet paper), and given that the virus is not that much more lethal or transmissible than the normal seasonal flu viruses, if not less so.

1. The brain is designed to shut down in times of perceived external threat to promote herd behavior for better potential survival. Mass manias take away the capacity to think.

2. Health manias are always way worse than wealth manias, since health is ultimately more important than wealth, and not everyone has wealth (so not everyone can participate in wealth manias).

But also, these obvious points on corona mass mania irrationality:

* People lament the lack of tests, oh this is so horrible! But in the very next breath they cite very scary numbers on R naught, and lethality.

They can't both be true!!! If you don't know how many people have it, you cannot possibly know R0 or lethality. Stop doing this!

* People say oh how horrible the end of flu season won't bring respite because look, people in warm weather Singapore got it! (or chose your warm country)

Without bothering to understand that warm weather regions have their flu seasons too based on changes in temperate and changes in humidity. And without bothering to notice that Singapore was until a week ago in its flu season! Totally irrational and nonsensical thought patterns.

* People say coronavirus is scary because it is new and we know nothing about it. Then they say it is scary because it is highly contagious. They can't both be true! Get a grip!

At least be internally consistent with your logic.

* People say a big risk is that viruses mutate. Of course they do, but why assume it will mutate for the worse? In fact, new C19 strains have been found which are far less lethal, not more.

People cite the Spanish flu as relevant, without bothering to notice we did not have antibiotics back then. That matters because secondary bacterial infection in the lungs is often what kills virus victims. Did you know that the Spanish flu is one of the seasonal flu viruses that regularly circulates today? That's scary!!! Or is it?! Did you even know this, while you were citing the historical example of the Spanish flu as a reason to be scared merde-less?

It is also interesting to note that virtually all the groups being alarmist have a personal interest in doing so.

* Health care system managers, because they see a potential onslaught of patients overwhelming the number of ventilators etc. and exposing their poor foresight and lousy management skills, so they want to bend the curve. This is understandable. It is now evident they are way overpaid, and they are heading for cover.

* Medical researchers are alarmist because they are trying to attract funding for their pet projects. (see shameless funding request advertisement in the middle of the Attia podcast today). This is shameful!!!

* The media are alarmist because it generates ad revenue. Also shameful.

* Negative Eeyores and worry warts want other people to be negative and worried because miserable people naturally repel most people so they try to bait social company with extra doses of misery to capture attention, and because miserable people love miserable company!!!

Everyone just calm the f down!!!

Go smoke a joint! Drink your whiskey! Pray to your imaginary man in the sky! Meditate! Go work out!

Whatever it is you do to calm your nerves go do it now!!! And turn the media off!!!! Especially twitter!



In this awful market collapsing day today, let me share with you a youtube video about this interesting property of copper just in case you don't know about this already.



I think it valuable to test the hypothesis that on certain days there are more crosses of the round number 50 as in 3250 in emini futures than is random.

Theo Athanasiadasis writes: 

This needs to be tested on intraday basis. On daily basis there is no statistical evidence. There is a small tendency to have more crossings than expected but in line with randomness. Happy to share the testing process/code. The idea is to compare the historical ES crossings of 50 (based on settlement prices) with random index moves that could have happened (bootstrapped delta estimated from adjusted prices). 

Since emini inception (10k simulations):
Historical Number of Crossings=1260
Expected Num Crossings (average of random bootstraps)=1246
Confidence Interval=[1196,1296]
Pval = .32
Similarly for the last 10years
Historical Number of Crossings=654
Expected Num Crossings (average of random bootstraps)=642
Confidence Interval=[608,677]
Pval = .29

What is perhaps more interesting from daily data is the 100point rounds. There is close to non-random tendency for ES to avoid crossing those levels frequently.

Since emini inception (10k simulations):
Historical Number of Crossings=620
Expected Num Crossings (average of random bootstraps)=649
Confidence Interval( 5,95) =[614,686]
Pval = .92
Similarly for the last 10years
Historical Number of Crossings=314
Expected Num Crossings (average of random bootstraps)=334
Confidence Interval( 5,95)=[308,361]
Pval = .91



 He was a great guy, genuine, open and a superb businessman/salesman. I enjoyed our talks enormously, as he knew retailing really well. The wine tastings he did at his house were a blast, as you would expect. He could be really funny, especially with the pretentious.

He lived down the street from us, and my wife was friends with his daughter Charlotte, who was the construction manager for the new (at the time) Getty Museum on this hill.

The family gave back a lot, both to Stanford, the arts etc. I miss him, and wish there were more like him.



Here we go, Italy goes first with stimulus to counter COVID-19.



With Trump's failure to blame the market crash on Bernie, and repeated observations that Blackrock's "ESG focus" is contributing to the Energy Crash - one wonders if the 'fall guy' for the crash is Larry Fink, a virtue/climate signaling financier who would energize Trump's base.

With BP's exit from climate council and XOP breaking well through 08 lows in an election year, and the mysterious disappearance of the word "fracking ban" from the democratic debates as well as Pelosi's behavior towards Sanders — things do appear to be setting up in an interesting manner re: an inflection point on the climate narrative.

Actions by the Trump administration to hold Blackrock and its executives liable for energy bankruptcies could result in a panicked buying move in the energy sector, and a much needed market pump. It sounds insane - but what's the alternative? Rate cuts can't stop Blackrock from divesting and exacerbating the CHK / other distressed situations.

I am toying with the idea of buying puts on Blackrock funded by a long solar company position w calls sold against them (calls extremely expensive in solar because retail loves buying them).



Energy stocks are down 20-30% for the year with valuation below the levels when oil was trading @30$/barrel. From that perspective they look attractive but it can easily be a value trap. Does anyone have a thorough view?



On another note, America should send large aids to Iran now! A lot of benefits in doing so. It will help the US to win Iran on its side from China. Most important is that the kind gesture will help later on solve the peace issue in the Middle East.

Kim Zussman writes:

They will have to wait until next year when Bernie sends more pallets of cash, which hopefully will work better than last time.



Till 7th February 2020, to begin with, anyone wanting to sell above a certain size needs permission before-hand.

Without a selling side there is no effective buy side to a spread. Fine, so this gum-mint is going to yank up the market prices. Huh! Such tricks can at most postpone the catharsis. The more a catharsis is postponed the more cataclysmic it gets.

Increasing short sales create a bubble of impetuous, emotional sporadic buying pressure because shorts do not have a long term drift to back them an eternal position. This basic axiom of markets is missed by regulators so often. A market with sufficient shorts is the market that will find sporadic rounds of panic buying to lift it much more.

In any case if no one will be buying in that market, if that's what their gum-mint thinks, then even if sales are prevented here the bids will slide down without activity. Such a market becomes hollower than it would be with normal sales allowed!

Why don't the Chinese shut down their stock market for some days then?

On the other hand, TA-35 gapped down more than 1.5% today and skidded and bumped down further. An uneasy Sunday & as Asia re-opens in four hours the intraday-violence of the markets will offer many quick hands largesses that are not often.

While the initial flight to safety has taken recourse to seek US Treasuries, melting the yield curve lower, the sell off on the Dollar Index is remarkably clearly due to the inexplicable smart one day rise in the Euro.

If Corona is the epicenter of all things now, why should Euro rise? I cannot surmise any other answer possibly except that when volatility turns into violence the popular trades in every pit are going to be bumped out. So if Euro seemed will melt into new 10 year lows its been whipped up.

Leverage is getting punished, trend seeking attitude is getting punished.

To come to the point without building a longer preamble, this juncture in the market is going to punish everything obvious. So what are the most unobvious trading ideas?

My chit in the ideas hat is short gold. The shiny pit is not reflecting the sort of behaviour a total risk-off world should. The collateral damage will be for short term gold bulls, now.

What are your unobvious ideas? Care to drop your chits in the ideas hat?



Just for comparison, FEZ closed Friday at 39.10, and the 2022 39 calls (farthest out available) show a closing ask of 3.05, which is 7.8%.

Cagdas Tuna writes: 

It must be due to pricing. Dax, Eurostoxx futures priced in Euro while ETF priced in USD.



There are many ways to graphically represent this data. The one illustrated here is the kindest: Payroll Tax Receipts Growth



Impeachment Blues

By Preparation H

Pelosi and Schiff looking for a crime

Issuing subpoenas as cheap as a dime

Fact witnesses can't be found

Yet bravado and innuendo abound

Nadler and henchmen wait with bated breath

Nary a Republican that they impress

It's saving the Republic they claim

But it's their lust for power for which they aim

Not Maxime Brown nor Schiff are fair in this quest

The media is complicit with the rest

The sequel to this sorry state

A Trump victory in 2020 with which we elate.



Sultan Qaboos of Oman dies

- Oman was a source of stability in the middle east.

- He was gay.

- Now his succession is in question. Or that is the fear.



 "A Clever New Strategy for Treating Cancer, Thanks to Darwin"

Relevant to big rises in a year in S&P?

Bill Rafter writes: 

This is a fantastic article for anyone with cancer, particularly prostate cancer. Thanks for posting.

K.K Law writes: 

A broader point is this is another excellent example of out-of-the-box thinkers and doers who create revolutionary innovations.

Dylan Distasio writes:

Unfortunately these innovations occur in spite of the current US system not because of it.

Gary Phillips writes: 

Not unlike market analysis, the key to effective clinical observation is how the scientist conceptualizes the problem, and how he uses the information gathered. The dilemma presented with molecular targeted therapy using chemotherapy, is the very process that induces cell death (aptosis) can also promote (chemo)-resistance.This is quite the recursive paradox. Chemo drugs activate multiple signal transduction pathways which can contribute to either aptosis or chemo-resistance. One of the ways to circumvent this problem is to use a combination of drugs; employing another drug that targets the signal pathways that contribute to resistance. Of course, treatment varies from one patient to another, and the major challenge is to develop individualized therapy options that are tailor made to the patient.

Ever changing cycles and evolving markets dictate that traders must be agnostic and and adaptive. A tested, multi-variate approach tailored to the intrinsic nature of the current market regime will provide the best assessment of the market's context and offer the best approach to trading that particular market.



"Financial Transaction Taxes - the ghost in the machine"

Mr Hurd, who made markets in KOSPI options, knows a bit about US hft as well.

2 points:

+ the USA already has a financial transaction tax, SEC self-reg fees of $2000mmm last year.
+ Virtu's quarterly revenue is "only" $127mm. This puts a heavy limit on what an HFT tax could be estimated to raise. And, to Mr Williams' point, speed isn't everything. The total amount people make in the markets makes $half a billion usd of yearly revenue look small.

(sorry, I saw an estimate of the total size of the asset management industry on some slide somewhere not very long ago, but I'm too lazy to look it up.)

keep looking »


Resources & Links